C O N T E N T S

FERTILIZERS

Ammonia

Phosphates

Potash

Sulphur

Sulphuric acid

Urea
 S&D Outlooks - Fertilizers
AMMONIA
Q4 2018 - Market Review
Supply
EUROPE
Ammonia exports from the Black Sea were severely
disrupted by weeks of bad weather in the Dardanelles
and a new tug boat regime in the Bosphorus, with
vessels suffering major delays to/from the Black Sea.
With uncertainty over loading schedules, Russian
producers reduced pipeline pumping rates, meaning
Ameropa was reluctant to commit to spot sales.
Trammo and Fertiberia agreed a freight partnership that
will see the former use its fleet to deliver Algerian
volume to Spain and Portugal.
Demand
EUROPE
Few spot deals were seen as the vast majority of buyers
in northwest Europe were covered by contract
deliveries. Global bearish conditions also deterred spot
business, as buyers knew the longer they waited, the
better the price. Yara’s operations in Scandinavia
received a pair of 25,000 tonne spot cargoes from BASF.
The material came from Trinidad via Mitsui as
maintenance at one of the Norwegian group’s European
plants reduced output for several weeks.
Q1 2019 - Market Outlook
Supply
EUROPE
Disruption to Yuzhny loadings saw some players swap
cargoes to cover their requirements for early 2019. Soft
demand in the US meant Caribbean volume helped
offset some of the loss from the Black Sea. The Baltic
contract price fell 10% for January loadings from
December, while Yuzhny prices also slumped amid
global overcapacity.
Demand
EUROPE
Given the strong downward pressure on prices, spot
buyers appeared in no rush to secure cargoes for
January or February arrival. Little business was seen in
the Black Sea, Baltic, or Algeria, with contract cargoes
continuing to flow into Antwerp, and Yara moving
material between sites in northwest Europe and
Scandinavia.
ASIA
A strong performance by the new Panca Amara Utama
(PAU) in Indonesia saw exclusive offtake partner
Mitsubishi sell several spot cargoes on a FOB and CFR
basis. Mitsui and Trammo were among the traders to
load their vessels at Luwuk, while Mitsubishi also
shipped volume to Taiwan and China. A turnaround at
the Kaltim V plant in Indonesia from late November/ear-
ly December reduced that producer’s export volume,
but the impact was negligible given global oversupply.
ASIA
Spot buyers in Korea and Taiwan concluded very little
spot business for late 2018 arrival, although Chinese
buyers secured volume for discharge at Zhanjiang and
Caojing. India’s FACT was very active as it issued and
awarded several purchase tenders to suppliers
including CIFC and Muntajat. At least one spot cargo
was delivered to Japan amid talk of domestic
production issues, and spot parcels were also
discharged for CJ in Indonesia and for Philphos in the
Philippines.
ASIA
With no shortage of spot volume either side of the Suez,
manufacturers are expected to launch plant
turnarounds or cut capacity. Saudi giant SAFCO will
perform several such shutdowns over the next few
months and Indonesia’s Kaltim V unit will not exit a
turnaround until mid-March.
ASIA
Suppliers have been heard struggling to place cargoes
in early 2019. This was illustrated by the favourable price
of $330/tonne CFR secured by TFC Taiwan and BASF
China for Indonesian volume from Mitsubishi for
January discharge.
US
Several weeks of increased natural gas curtailments in Increase
Trinidad mid-quarter eventually had little impact on the
ammonia market in the Americas, with soft demand
from the US agricultural sector offsetting most of that Constant
lost capacity. In addition, several Venezuelan cargoes
from Pequiven were sold on a FOB and CFR basis to the
likes of Koch, meaning the deeper feedstock cuts failed
Decrease
to provide any support to prices in the short term.
Mixed
US
Bad weather in many key crop growing areas impacted
ammonia demand significantly and meant the fall refill
application season was one of the worst on record. This
was reflected in the Tampa contract price which jumped
$25/tonne for October loadings, before rolling over into
November and then falling sharply for December and
January. Robust spot demand from Mexico saw traders
conclude deals with PEMEX, including a rare delivery to
Coatzacoalcos.
US
Given the bearish conditions forecast by market
participants for January and February, it would be no
surprise to see capacity cuts implemented or plant
turnarounds launched. CF Industries will shortly export
its inaugural cargo from Portland, Oregon. Ammonia
producers in the US and Trinidad have yet to outline
their production plans and maintenance schedule for
2019.
US
In Mexico, PEMEX’s import requirements are expected
to surge as domestic production is instead consumed
by restarted urea units. The $40/tonne slide in the
Tampa contract price for January loadings was far
steeper than expected, and while the market is bearish
both regionally and globally, a repeat for February’s
contract settlement is currently considered unlikely.
 PHOSPHATES
Q4 2018 - Market Review
Supply
EUROPE
European phosphates supply in the fourth quarter was
stable, as producers targeted the continent on its high
demand season. Producers from North Africa and the
Middle East mainly continued to supply the region, as
they can get better netbacks than other regions where
demand had died down. Also, freight was favourable for
producers from Africa but also from Russia. The latter
continued to ship cargoes to domestic and regional
markets where demand for phosphates has not slowed
down.
Demand
EUROPE
Phosphates demand in Europe in Q4 was stable, as
buyers were looking for cargoes following the summer
lull. Cargoes from Morocco, Tunisia, Jordan and Russia
were sold as buyers did not want to finish the year with
excess product. Moreover, adverse weather towards the
end of the year made shipments to Europe more
difficult.
Q1 2019 - Market Outlook
Supply
EUROPE
Phosphates supply in Europe is expected to be constant
for the first quarter, as producers are focusing on the
region. Buyers continue to make purchases for spring
and the next season, as buying had been slow in 2018.
Russian and Moroccan producers will be focusing on
Europe this quarter where netbacks and demand are
better than other regions.
Demand
EUROPE
Phosphates demand in Europe is expected to be strong
in the first quarter, as buyers return to the market. They
will need to make enough purchases for the next
season, as demand for spring application has been
fulfilled already. Demand is expected to increase, as
phosphates buying in 2018 was minimal.
ASIA
Supply for phosphates in Asia in the fourth quarter has
been steady, as Chinese plants mainly retained their
operating rates. However, those rates are reduced as the
Chinese government continues to crack down on
environmental pollution in the country. Also, cargoes
from the US, Saudi Arabia and Morocco kept the supply
scenario stable, as producers targeted this region. The
lack of major demand from Brazil has focused the
producers’ attention to Asia for this quarter.
ASIA
Demand for phosphates in Asia was increased in the last
quarter of 2018, as main demand region India kept
buying DAP. Phosphoric acid contract prices in India
kept increasing since Q1 2018 which meant that the
appetite for imported DAP was stronger during the year.
Also, there was demand for NPK in India and Ethiopia
that were mainly covered by Russian and Moroccan
producers. There was also stable phosphates demand in
Pakistan and Australia in the fourth quarter.
ASIA
The first quarter of the year started on a slow mood, as
Chinese producers are out of the phosphate market and
focusing on their domestic season. They are expected to
stay away from the market at least after Lunar New Year
in early February. This coincides with low demand in
southeast Asia and since the only active region is in
Australia, Chinese cargoes are continuously being
shipped there.
ASIA
Asian demand is slowing down for the beginning of
2019, with Australia mainly driving the market. India
and Pakistan have bought enough DAP in 2018 to cover
their needs and further purchases are expected to be
minimal in the first quarter. However, it will all depend
on the settlement of the phosphoric acid contracts for
Q1 and whether it will be cheaper to import DAP or
produce it domestically using phosphoric acid.
US
Domestic supply levels were fairly constant for the
typically slower winter season seen across most of the
crop regions. Although supply was at hand, this was
met with very little buying interest because the supply
pull at the farm gate was seasonally lower. There was
also less pressure for importers who did not squeeze
the market with extra volumes given that farming
activities were mostly sidelined.
US
Overall demand was decreased during Q4 but this is
typical in the US following harvest and with onset of
winter. There was also a reduced window in many of the
key states as harvest was delayed with unfavourable
weather conditions persisting in many regions. This left
phosphate applications diminished and deferred until
the spring. Whatever movement was seen was generally
driven by the restocking of retail inventory during the
quarter but new buying was mostly vacant.
US
With spring unfolding during the Q1 period it is
anticipated that levels will rise steadily to meet the
forthcoming buying needs as warehouse inventory will
meet some of the early demand but is not stockpiled
enough to cover the full season. Supply upticks will Increase
likely be pushed by both domestic output and by
importers looking to hit the Nola market in time to
meet the spring season needs. Constant
Decrease
Mixed
US
With the start of spring demand levels will rise quickly
with early buying and applications anticipated to be
more pronounced due to the shortened post-harvest
period, which saw inputs either cut short or deferred
especially for phosphates. There will also be the start of
spring in many states which will further enhance
demand levels.
 POTASH
Q4 2018 - Market Review
Supply
EUROPE
European potash supply tightened in Q4 2018, notably
on outages at Germany’s K+S and Belarus Potash
Company. Russia’s Uralkali repeatedly denied
production constraints. Expected new capacity also
failed to materialise – notably from EuroChem’s two
massive Russian mines. K+S, which suffered numerous
outages at three plants on the river Werra, owing to low
water levels, suffered a €10m hit to its fourth-quarter
earnings as a result of the stoppages.
Demand
EUROPE
Potash demand slowed in the fourth quarter, with the
approach of winter, and festive holidays. What early
demand for spring granular volumes was heard centred
on an increase of up to €15/tonne, although buyers
appeared in no rush to settle prior to new year.
Q1 2019 - Market Outlook
Supply
EUROPE
As Europe moves into the spring planting and
application season, supply to the region should increase
– although suggestions of production constraints at
Uralkali in Russia remain a concern, and other legacy
majors have admitted availability could be tighter than
usual, because of potentially higher netbacks to other
regions of the globe. Although global potash capacity is
statistically still in oversupply, buyers are unlikely to feel
any such relief amid production control, and a slow
ramp-up period.
Demand
EUROPE
European muriate of potash (MOP) demand will steadily
increase throughout the first quarter, as buyers look to
refill depleted stocks, in preparation to distribute to
fertilizer-hungry end-users preparing their fields for the
planting season. Downstream sulphate of potash
production will also be a key consumer of European
MOP, and has shown little sign of weakness.
ASIA
In southeast Asia, weaker palm oil export prices gave
importers a moment's pause in Q4 2018, leading to a
reduction in supply and availability. Buyers instead
forecasted demand requirements for Q1 2019, and
approached producers in an attempt to secure cargoes
early. Many were turned away, as producers were
unwilling to commit that far ahead. Legacy producers
found themselves under threat from cheaper-priced
imports out of Laos, although some buyers rules
Laos-origin material as lower quality, and would not
consider purchasing, even for blending purposes.
ASIA
The southeast Asian potash market slowed in Q4,. Palm
oil exports remain a concern for plantation owners.
Deforestation and environmental destruction at the
hands of palm oil producers are increasingly a concern
amongst the European public.
ASIA
Availability in Asia has been tight throughout Q4, and
this situation will likely continue into Q1. Several large
tenders are out to offer, although a lack of ready volume
and high fuel costs are likely to continue to prevent easy
trade, and to drag out negotiations. Spot tonnes will
likely remain limited, although legacy producers
continue to find themselves under threat from
cheaper-priced imports out of Laos.
ASIA
Tender activity was slowly building towards the end of
Q4 2018, and more business is expected throughout the
first quarter - notably from large plantations, and
conglomerates of buyers looking for good-quality MOP
at an agreeable price. Palm oil exports remain a concern
for plantation-owners - notably to Europe, where
legislature is taking aim at the product, and public
opinion is souring. The extent to which the anti-palm oil
movement will lead to reduced MOP imports to
southeast Asia is as-yet unclear.
US
In the US during Q4 period the domestic supply levels
were fairly constant for the typically slower winter
season seen across most of the crop regions. Part of the
evenness to the inventory situation is due in part to Increase
widespread fill buying within the market. There were
also no production disruptions that had great impact
and importers were fairly reserved, owing to the lack of Constant
interest from farmers at this point in the crop calendar.
Decrease
Mixed
US
Overall demand decreased as new buying interest for
potash was reduced during the quarter as farmers did
not engage in additional purchases as market
conditions remained unfavourable with crop prices still
challenged by tariffs. Also with the early onset of winter,
coupled with a delayed harvest, applications rates were
left lower than usual. There was some favourable
movement for re-stocking retail inventory during the
quarter, which will help when spring demand appears.
US
Q1 will see the start of US spring activities and as such
US volumes will steadily rise to meet those needs, which
could also be on the increase if the amount of spring
deferments was as large as forecasted. This will lead to
an uptick in movement as volumes are bought and
placed through the quarter. While imports will target
the spring season, it is unclear whether New Orleans
becomes a favourable destination for even more
vessels.
US
During Q1 farmers will decide on which crops they are
planting, and with that comes early buying and
applications over the quarter. It is expected that crop
prices will stay challenged through early 2019 and that
due to its value and nutrient ratio, potash will be a
preferred choice for more acreage. The rise could be
especially strong in areas that had recent application
efforts deferred to spring.
 SULPHUR

Q4 2018 - Market Review

Supply

EUROPE ASIA US

Europe supply tightened in the fourth quarter on the
back of logistic disruption indirectly resulting from low
Rhine river levels. This caused an overloading of the
train system, resulting in difficulty finding train slots and
drivers. The low water levels also affected barges,
because although most sulphur shipments do not travel
down the Rhine, the number of vessels going down the
Rhine with low volumes meant occupancy rates were
high and barges are in short supply. Sulphur supply was
already tight in Europe because of refinery outages and
problems at the Grossenkneten gas field. With winter
water restrictions now in effect in Russia, there were few
areas locally that were able to find relief.
Middle East availability remained restricted throughout
the year because Saudi Arabia increasingly used
material domestically and ADNOC agreed to a new
supply agreement with OCP. In Q4, availability from
Eastern Europe became increasingly restricted as winter
weather froze Russian waterways and prevented
material from travelling through the Black Sea. Refinery
outages resulted in a greater pull on material from the
Mediterranean, further restricting global supply during
the quarter. This was, however, counterbalanced by
weak demand.
Supply was steady in Canada during Q4 due to
conflicting forces that balanced each other out. On the
one hand, Shell Canada had a major outage during the
quarter, which reduced production in Alberta. On the Increase
other, demand for product softened as China kept out
of the market, so less tonnes were exported from
Vancouver. In the US, there was no major impact on Constant
supply during the quarter.
Decrease
Mixed

Demand

EUROPE ASIA US

Unlike other global regions where the bulk of buying
interest comes from fertilizers, the major demand driver
for sulphur in Europe is the petrochemical chain, and
predominantly caprolactam (capro). Demand from the
capro market remains broadly stable and contracts and
supply factors tend to dominate contract discussions.
Nevertheless, with China demand volatile and driving
sharp spikes and troughs in international prices during
2018, China consumption has become an increasingly
important talking point in contract discussions. China
demand slumped during the fourth quarter.
Chinese buyers were largely absent from the market
during the quarter, putting great downward pressure
on global spot prices. China continues to act as the
control valve for international spot values. Chinese
demand was weak because of currency fluctation and
the end of the key Indian phosphates season. China had
been expected to return to the market at some point
during the quarter in preparation for the domestic
phosphates season and stockpiling ahead of the Lunar
New Year, but the majority of buyers chose to work
down inventories and consumption remained muted.
Chinese demand for Canadian tonnes fell significantly
during the quarter. Other countries continued to
import, but because China was the largest consumer of
tonnes out of Canada, overall demand in the region fell.
Brazil steadily continued to import tonnes from the Gulf,
and OCP returned to the market for US sulphur after a
long stint on the sidelines.

Q1 2019 - Market Outlook

Supply

EUROPE ASIA US

With Rhine water levels recovering significantly, the
resultant supply disruption seen during the fourth
quarter has dissipated. Coupled with this, the
Grossenkneten gas field has recovered from its
production problems and plants in the region are once
again operational. Nevertheless, Black Sea water
restrictions are expected to remain in force until the end
of the quarter (inline with traditional seasonal patterns)
and there remain a number of refinery outages that
continue to restrict supply.
Although spot sulphur supply is structurally tight, China Sulphur supply will likely remain somewhat tight in the
is expected to remain the control valve for the market in US throughout Q1, party because the sulphuric acid
2019, with the relative strength of Chinese demand market consumes as much as possible through sulphur
dictating global prices. burning facilities. In Canada, Suncor/Syncrude saw high
Global spot sulphur supply is tight as a result of a shift production rates during Q4 that may continue into the
to a sweeter crude mix, lower volumes out of Saudi beginning of 2019.
Arabia due to increased domestic consumption and
because ADNOC contracted a larger portion of its
sulphur supply to OCP. The first quarter typically sees
limited tonnes through the Black Sea because of poor
weather condition on Russian waterways and a heavy
turnaround schedule at European refineries.
The approach of IMO 2020 regulations and how
shippers will comply with regulations has made supply
levels for the year difficult to forecast. If shippers choose
to use scrubbers – which extract sulphur from fuel – to
comply, this will result in a significant increase global
supply. If, however, shippers choose to switch to
blended fuels to comply, this will encourage a greater
and more permanent shift to a sweeter crude mix,
which will result in sharply lower sulphur production.
 Demand
EUROPE
European demand is likely to remain stable, as is typical
in the market. Nevertheless, attention will remain on
China, which continues to be the bellweather for global
market direction. China demand in across January
remains difficult to predict as many players still have
open positions ahead of the Lunar New Year as buyers
have largely been absent from the market since
October. February is likely to see demand tail off
because of the Lunar New Year holiday period.
ASIA
ICIS analysis reveals that China arrivals typically fall
sharply in January before bottoming out in February.
The first quarter is the weakest of the year, and imports
historically remain weak throughout the first half of the
year. Chinese demand is not expected to follow a typical
trading pattern in January. The majority of Chinese
buyers have not been active since the Golden Week
holiday last October as they have been unsure about
developments in the downstream phosphates market.
As a result, most have yet to cover themselves for the
Lunar New Year holiday period in February. Sources
estimate that orders must be completed by mid-Janu-
ary for volumes to arrive on time, and buyers are
expected to return to the market imminently as a result.
US
Demand in the US and Canada is expected to increase
during Q1. China is likely to return to the market for
Canadian tonnes after being on the sidelines and
consuming domestic inventories for several months.
Brazil will be more active in the market now that the
end-of-year holidays have passed. With global prices
softening, sulphur burners will have a strong incentive
to purchase sulphur for sulphuric acid production
because that market continues to see high prices.
Increase
Constant
Decrease
Mixed
 SULPHURIC ACID
Q4 2018 - Market Review
Supply
EUROPE
European sulphuric acid spot supply remained tight
throughout the fourth quarter of 2018. The majority of
European sulphuric acid sellers remained sold out of
export material, and supply is expected to remain tight
until at least the second half of 2019. European
producers heavily committed to contract markets
during 2018, where margins were higher at the start of
the year. Nevertheless, by the end of 2018, spot values
had risen significantly above contract values.
Demand
EUROPE
Demand for Europe export material rose sharply in the
fourth quarter, driven by rising buying interest from
South America. Buyers in Chile bought heavily during
the fourth quarter, bucking traditional demand
patterns. This was ahead of new sulphur dioxide (SO2)
emissions legislation, which came in to force in
December. A number of companies have reduced
production as a result of the legislation, increasing
import demand. Brazil also returned to the market in
the fourth quarter, intensifying buying interest.
Q1 2019 - Market Outlook
Supply
EUROPE
European spot supply is expected to remain tight
throughout the first half of 2019, in line with global
supply patterns and ongoing strong demand. Global
availability will in part depend on how quickly Chilean
producers are able to adapt plants to comply with new
emissions legislation, and when Sterlite’s Tuticorin
smelter in India comes back on stream.
ASIA
The Asia sulphuric acid spot market remains tight. The
main reason behind low availability in 2018 was the
unexpected closure of Vedanta-owned Sterlite Copper’s
smelter in Tuticorin, India, in May 2018. The smelter –
which is India’s largest and has the capability to produce
1.2m tonnes/year of sulphuric acid – was forced to close
by the government for pollution breaches.
ASIA
New sulphur dioxide (SO2) emissions restrictions, which
came into force in Chile on 13 December curtailed
production at a number of domestic producers –
including Codelco and Anglo American. Chile is one of
the largest importers of sulphuric acid and expectations
of lower domestic production saw a jump in demand
for overseas cargoes during Q4. This led to a spike in
Chile import prices, with values increasing as much as
25% week on week at the end of October, when the
extent of the compliance problem became clear.
ASIA
“With a large amount of carry-over volumes once again
in Japan, and with heavy quantities of South Korean
and Chinese material already tendered for 2019 free
spot volumes are expected to remain scarce next year.
Coupled with this, 2019 will mark a heavy-maintenance
schedule in Japan/South Korea, in line with the typical
two-year cycle.
On Saturday 15 December, the National Green Tribunal
(NGT) found in favour of Sterlite’s appeal against the
closure. The NGT declared that decision “”unjustified””
and “”non-sustainable””.
Fresh tonnage from Tuticorin would help relieve supply
pressure in the market, although this is not expected to
become apparent until the second half of 2019. The
impact is expected to be significant enough across the
year that India buyers delayed contract discussions
while they were awaiting the outcome of the appeal.”
US
US sulphuric acid supply remained tight, with no major
outages heard. Two rounds of cargoes were heard
purchased into the US Gulf, one at the beginning of the
quarter and one toward the end. The influx of tonnes
raised the price range each time.
US
Demand remained stable, though a slight softening was
heard toward the very end of the year ahead of the
holidays. Demand for sulphur-burned tonnes is strong
due to a global tightness that has made importing
tonnes difficult due to sourcing and cost.
US
Supply for the first half of 2019 is expected to be
constrained in the US due to two separate Kennecott
maintenances that are planned. In Canada, Teck’s
replacement acid plant at its Trail operations is more
than 82% complete and should be commissioned
during the second quarter of 2019. So while supply will
Increase
likely be tight during Q1, additional tonnes may balance
things going forward.
Constant
Decrease
Mixed
 Demand
EUROPE
Chile is one of the largest importers of sulphuric acid
and the expectation of lower domestic production led
to a flurry of demand for overseas cargoes from Chilean
buyers during the fourth quarter of 2018, amid already
tight global availability. Domestic availability is
expected to remain low throughout the first quarter.
How long tight domestic supply continues beyond that
is likely to depend on how quickly plants become
compliant with the restrictions.
ASIA US
“Global demand, meanwhile, remains strong – With no new major plants expected to come on line for
predominantly driven by Chile. Buying interest is additional consumption during the quarter, demand
expected to remain above spot availability throughout should remain mostly steady. Global fundamentals of
2019 because of the number of contract commitments tight supply and higher pricing has kept much of the US
agreed in the market. market scrambling just to fill its current needs.
Sulphuric acid export values were in negative territory –
signalling producers were offering money for the
removal of product rather than pay storage cost – as
recently as 2016, due to it being considered by many
manufacturers as a waste product. With sulphuric acid
export prices in Japan and South Korea at their highest Increase
level on record, Europe and China spot export prices at
their highest level since December 2011, it is
unsurprising that many producers have been Constant
attempting to maximise contract volumes and lock-in
material values at their current high levels – leaving
lower tonnage available to spot markets in 2019. Decrease
Multiple sellers in Asia have committed spot volumes
tender, leaving little free tonnage available in 2019. Mixed
Buyers – particularly in Chile – have been purchasing
volume to be distributed throughout 2019 to avoid a
repeat of what occurred in 2018. “
 UREA
Q4 2018 - Market Review
Supply
EUROPE
There were no problems with the supply of urea in the
fourth quarter even though India came to the market
for a requirement in excess of 4.2m tonnes. Egyptian
tonnes moved to India rather than typical homes such
as Turkey or northwest Europe, but this did not impact
on market dynamics. The fourth quarter is typically a
slow time for demand in Europe, and this was more
pronounced because prices fell as the quarter
progressed.
Demand
EUROPE
Urea demand is typically at its lowest in the fourth
quarter and this was more pronounced in 2018 because
of falling prices. Turkey stepped back into the market for
tonnes, but buyers benefited from lower prices against
a backdrop of international weakness. As the quarter
progressed, discussions centred on spring demand and
the reluctance of buyers to adopt a position before year
end.
Q1 2019 - Market Outlook
Supply
EUROPE
There are no major concerns about the supply of urea in
the first quarter, but there is speculation that there will
be a spring surge as co-operatives and farmers will
require volumes at the same time. If buyers wait until
the last minute, this could result in firmer European
prices and logistical problems.
Demand
EUROPE
Demand is typically at its best during the first quarter
when Europe prepares for spring application. The
weather is a key factor as adverse conditions will
prevent farmers from applying nutrients to the soil,
particularly if there has been heavy snow. Because
prices dropped in the last few months of 2018, buyers
have been holding out in the hope that they will fall
further. As a result, sellers are talking about the
possibility of a ‘spring surge’ in demand, which could
see logistical problems including storage at warehous-
es, offloading at ports and a lack of truck availability.
ASIA
Chinese export availability came as a surprise for the
market with producers keen to export to India and
other markets given weak local prices. Chinese
operating rates remained low but local demand was
also thin., so more was available for export compared to
previous quarters. Malaysia and Indonesia had
scheduled maintenance during the quarter while Indian
domestic producer Nagarjuna was also down.
ASIA
Indian demand continues to be healthy and the only
support for the market with over 2.5m tonnes
purchased by the country during the quarter. Southeast
Asian demand was met by contract commitments from
Malaysia, Arab Gulf and spot sales from Indonesia. With
the exception of India, where demand has been much
better than expected, there was no major increase in
demand anywhere else.
ASIA
Chinese availability in the coming quarter is expected to
increase as gas supply to urea plants is expected to
improve. Indian local production is also likely to be
higher with a new 1.3m tonne/year starting up on 1
January while the Nagarjuna unit has also restarted
production. In Indonesia, Kaltim is expected to continue
having some maintenance while Malaysia is due to run
normally.
ASIA
Indian demand is expected to emerge in end January
while no major demand is likely further from
Bangladesh and Pakistan during the quarter. Southeast
Asian demand will continue to be met with contract
deliveries.
US
In the US during the Q4 period the market saw
decreased supply primarily due to less imports into the
market as the current levels seen, especially for New
Orleans barges, were not attractive. This was due in part
to the market facing the winter period for agriculture,
and with less activity there was increased price pressure
which kept exports at bay, also some production shifted
lower domestically as the season typically sees reduced
activity overall.
US
Demand has decreased quickly during the Q4 period as
is traditionally seen in the US during the winter season.
There was also a reduced window this year for farmers
in many of the key states as harvest ran later than
normal and was then followed by unfavourable weather
conditions. This left many areas having to significantly
reduce or defer applications that would usually be
applied post-harvest during the final part of the year
until the spring.
US
As the market moves into the Q1 period it is anticipated
that supply will increase as the market readies for the
spring buying that will be forthcoming. As such
inventory will start to move as participants begin
acquiring and positioning further volumes. That supply
comes from both domestic producers but also from
overseas, as importers are expected to be targeting
their vessels into the Nola market to meet the spring
season needs.
Increase
US Constant
During Q1 farmer intentions will emerge and be
coupled with selection of their nutrient inputs with Decrease
early buying and applications anticipated to be more
pronounced due to the shortened post-harvest period,
which saw inputs either cut short or deferred. There will Mixed
also be the start of spring in many states which will
provide an immediate uptick . Due to its current
valuation urea usage could have an additional lift if crop
prices continue under pressure.